Case 5

1.Outsourcing
-In the recent times Outsourcing has become a very popular. It means “acquiring a product or service rather than producing it your self”. According to the Wikipedia Outsourcing means “transfer or delegation to an external service provider the operation and day-to-day management of a business process”. It is used by every organization in one way or the other. The functions being outsourced by the business are basically considered non core to the business itself.For instance, a car company requires a variety of screws and bolts. Rather than manufacturing screws and bolts themselves, the company might outsource their production to some other company or firms that specialize in making screws and bolts. Such outside companies or firms that provide the outsourcing services are referred to as “third-party providers”, or as they are more commonly called, “service providers”.Even though outsourcing exists ever since work specialization, but in the recent past, companies have started employing the outsourcing model for functions, like payroll, billing and data entry. These functions can be carried out more efficiently and cost-effectively, by the companies that acquire specialized tools and facilities and specially trained personnel for such functions.

2.Dis-advantages and Advantages of Outsourcing.
"Advantages"
*The benefits of outsourcing are:

*Less capital expenditure - For example, by outsourcing information technology requirements, a company does not have to buy expensive hardware and software.

*Less management headache - For example, by outsourcing business process such as accounting, a company no longer has to hire and manage accounting personnel.

*Focus on core competencies - Outsourcing non-core related processes will allow a business to focus more on it's core competencies and strengths, giving it a competitive advantage.

"Dis-advantages"
*Before deciding on outsourcing your company's business process, keep in mind the disadvantages of outsourcing:

*Less managerial control - It may be harder to manage the outsourcing service provider as compared to managing your own employees.

*Outsourcing company goes out of business - If your outsourcing service provide goes bankrupt or out of business, your company will have to quickly transition to a new service provider or take the process back in-house.

*May be more expensive - Sometimes it is cheaper to keep a process in-house as compared to outsourcing.

*Security and confidentiality issues - If your company is outsourcing business processes such as payroll, confidential information such as salary will be known to the outsourcing service provider.

3.Implication of Outsourcing.
-The discussion on high technology has been concerned with advanced capitalist economies. Developing countries have been unable to alter radically their industrial structure due to numerous internal institutional and external technological barriers. Consequently, they have sought global participation through outsourcing activities. This is indeed a welcome break from previous orthodox "self-reliant" approaches. However, excessive dependence on outsourcing limits the synergy between vibrant domestic and foreign markets. Using the Indian experience, this paper argues that international outsourcing of software, while commercially lucrative, is discouraging firms from taking on more complex projects at home. It highlights the shortcomings of outsourcing from India and suggests that software development must be rooted in a high technology policy that is integrated with the broader strategy of development. The study illustrates not only the relative success of a developing country but also underscores the persistent unequalising structural mechanisms that developing countries must contend with to foster local development.